Tuesday, February 23, 2010

Putrajaya's argument holds no water, says Husam

A Kelantan senior executive councillor has criticised the federal government for arguing that the state is not entitled to oil royalty under the Emergency (Essential Powers) Ordinance 1969 as it had been abolished in 1979.

State Economic Planning, Finance and Welfare Committee chairperson Husam Musa said as the ordinance was replaced with the Emergency (Essential Powers) Act 1979, the argument did not hold water.

"It was unbecoming of the federal government to use an ordinance, which had been abolished, in an advertisement in Sunday newspapers on the oil royalty issue," he said at a news conference in Kota Bharu today.

He was commenting on a full-page advertisement placed in the mainstream Malay language newspapers on Sunday by the federal government to explain to the people about the Kelantan oil royalty issue.

Husam said although the federal government would disburse part of the RM20 million compassionate payments to the people of Kelantan next month, it would not deter the state government from claiming the oil royalty from two oil fields off its coast.

Kelantan to decide on court action

He said the state government would decide whether to pursue with a court action against the federal government on the oil royalty's claim next week after meeting former Lord President of the Supreme Court Salleh Abas, who would brief state executive councillors and assembly persons on its legal implications on Sunday.

"We are not in a hurry to make a decision, including whether to pursue a court action, as we respect the law and the federal constitution.

“We will decide the next course of action after meeting Tun Salleh, who was responsible in formulating the Petroleum Development Act 1974 on March 28 (that year)," Husam (right) added, said Bernama.

The federal government maintained that the Kelantan government was only entitled to compassionate payments and not oil royalty because the state's right to oil and gas offshore was up to three nautical miles from the coast.

The gas is extracted in a joint development area managed by Malaysia and Thailand.

Meanwhile, Malaysiakini's Hazlan Zakaria reports that Husam also took a swing at the term 'compassionate fund' being used by the government as "a political label to justify the Mahathir regime's 2000 rescinding of the cash payments to Terengganu when PAS took over the state."

"The term 'compassionate fund' has no legal basis. It does not exist anywhere in the Petroleum Development Act (PDA), the 13 agreements, the 13 deeds of transfer or in any other act," said Husam, calling the term a BN invention.

He pounded the RM20 million BN 'compassionate fund' into a corner as a 'figure pulled out of thin air with no basis in law. "Our actual claim of deferred royalties is in excess of RM2 billion, with an annual payment of RM600 million," he clarified.

Unbecoming of '1Malaysia'

Husam also rapped the federal government's insistence that there exists a separate agreement for Sabah and Sarawak pertaining to their petroleum revenues.

He reasoned: "Until PDA came into effect in Octpber 1974, the basis of law for royalty payments to Sabah and Sarawak were governed by British colonial laws. However, when the act came into force, it became the only governing law for cash payments to Sabah and Sarawak and the rest of the 11 states".

"The two states are in the same boat with Kelantan, Terengganu and the other nine states. Everybody is treated the same under PDA, to avoid discrimination amongst the 13 states," he added, alluding that the conduct of things otherwise would be unbecoming of the '1Malaysia' policy.

Husam ended by praising Umno veteran Tengku Razaleigh Hamzah who came out in defence of Kelantan's right to oil royalties and criticising the federal government questionable use of 'compassionate fund' payment.

"As the founding chairman of Petronas, who has managed to coax all 13 states to sign the 13 agreements and deeds of transfer, he is well versed and able to speak on the matter."

"After all, he was the man who was trusted by Malaysia's second premier the late Abdul Razak with being the architect of our national petroleum policy. Who are they to question his opinion on the matter?" asked Husam in conclusion.

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About Me

Mohd Kamal Abdullah frequently writes in Malaysiakini, MalaysiaToday and in the FORUM column of MALAYSIA CHAT www.malaysia-chat.com. Kamal holds a law degree and was active in Malaysian Politics (a component party of Barisan Nasional) until of late, to concentrate on pursuing a post-graduate law degree in United Kingdom.